IBM Contemplates Integration of In-House AI Chip in New Cloud Service to Lower Cost

International Business Machines (IBM) is considering the use of artificial intelligence chips that it designed in-house to lower the costs of operating a cloud computing service it made widely available this week, an executive said, Reuters reported on Tuesday. 

In an interview with Reuters at a semiconductor conference in San Francisco, Mukesh Khare, general manager of IBM Semiconductors, said the company is contemplating using a chip called the Artificial Intelligence Unit as part of its new "watsonx" cloud service.

One of the challenges that the last Watson system experienced was high costs, which IBM hopes to alleviate this time. Since its own chips are particularly power efficient, Khare believes they could cut cloud service costs, the report added. 

Khare has now confirmed that the chip is being manufactured in collaboration with Samsung Electronics, a longstanding partner in IBM's semiconductor research endeavors. 

There is no defined timeframe for when the chip will be accessible for cloud users to use, but according to Khare, the company already has thousands of prototype chips in operation. Khare made it clear that IBM was not trying to design a direct replacement for semiconductors from Nvidia  whose chips lead the market in training AI systems with vast amounts of data.

Besides IBM, Microsoft, Meta, Google, Apple and Amazon have also been working on developing in-house AI chips. For instance, Google has built a supercomputer to train its models with its TPUs (Tensor Processing Units). Apple has been working on M1 and M2 chips for quite some time now. Amazon, on the other hand, is working on Trainium and Inferentia processor architectures.